• Revenue: $239.1 million, representing 11% year-over-year growth.
• Gross Margin: 82%, consistent with the previous quarter.
• Operating Margin: 20%, approximately 300 basis points better than the midpoint of the guided range.
• EPS: $0.36 per share, $0.095 better than the midpoint of the guided range.
• Unlevered Free Cash Flow: $87 million, a record for the quarter.
• Calculated Current Billings: $215.4 million, 9% year-over-year growth.
• Current RPO Growth: 13% year-over-year.
• Net Dollar Expansion Rate: 108%.
• Sales and Marketing Expense: $85.5 million, 36% of revenue.
• R&D Expense: $39 million, 16% of revenue.
• G&A Expense: $22.7 million, 9% of revenue.
• Cash and Short-term Investments: $460 million.
• Deferred Revenue: $808 million, with $633 million current deferred revenue.
• Share Repurchase: 1.6 million shares for $60 million during the quarter.

• Warning! GuruFocus has detected 4 Warning Signs with TENB.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tenable Holdings Inc (NASDAQ:TENB) reported 11% year-over-year revenue growth, exceeding their guided range by $5.1 million.
• The company achieved a 36% unlevered free cash flow margin, reflecting strong operating leverage.
• Tenable One platform drove significant sales acceleration, with the best quarter ever for seven-figure wins.
• The company is making progress in expanding integrations with third-party tools and data sources, enhancing their platform's capabilities.
• Tenable Holdings Inc (NASDAQ:TENB) is seeing strong momentum in cloud security and exposure management, with a notable increase in AI-related application detections.

Negative Points

• The company expressed caution due to macroeconomic uncertainties, particularly in the US public sector, impacting their guidance.
• Sales and marketing expenses increased, partly due to the annual sales kickoff conference, affecting operating margins.
• R&D expenses rose due to increased personnel costs from the Vulcan acquisition, impacting short-term profitability.
• Tenable Holdings Inc (NASDAQ:TENB) faces potential challenges from geopolitical events and policy actions that could lengthen sales cycles.
• The company acknowledged disruptions in the US public sector, particularly on the civilian side, affecting visibility and deal closure timelines.

Q & A Highlights

Q: Can you explain the rationale behind the cautious guidance for the year, given the strong start? A: Steve Vintz, Co-CEO and CFO, explained that the cautious guidance is due to ongoing macroeconomic uncertainties, particularly in the public sector. Despite a strong start and high demand generation, disruptions in personnel and leadership roles in the federal sector have reduced visibility. The company is taking a data-driven approach to assess longer lead times for procurement decisions, especially in the public sector, while also applying caution to the enterprise business due to potential geopolitical events.

Q: How is Tenable performing in the competitive vulnerability management (VM) landscape? A: Mark Thurmond, Co-CEO, stated that Tenable had a strong quarter with high win rates against traditional VM players like Qualys and Rapid7. The company also competes with endpoint players like CrowdStrike and Microsoft, but sees fewer engagements with them compared to traditional VM competitors. Tenable's ability to secure seven-figure deals by replacing incumbents highlights its competitive strength.

Q: How does the acquisition of Wiz by Google impact Tenable's cloud security strategy? A: Steve Vintz noted that Google's acquisition of Wiz presents an opportunity for Tenable, as customers may seek alternatives to avoid being locked into a single platform. Tenable is seeing growth in cloud security, with customers expanding their use of Tenable One to manage cloud environments. The acquisition has led to increased interest in Tenable's offerings as customers look for multi-cloud solutions.

Q: What is the impact of the potential end of funding for the CVE program on Tenable? A: Steve Vintz mentioned that while there were concerns about funding, it has been extended for the year. The CVE program is crucial for sharing vulnerabilities and exploits, and Tenable is one of the few companies contributing to it. The company is working with public and private sectors to explore better collaboration opportunities, recognizing the program's limitations and the need for improvement.

Q: What are Tenable's strategic priorities for the next 100 days as co-CEOs? A: Steve Vintz outlined priorities including expanding market opportunities through the exposure management platform, integrating third-party data with first-party assessments, and leveraging AI to deliver actionable insights. The focus is on consolidating security solutions and enhancing the Tenable One platform to provide comprehensive risk management.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.